3 Ways to Improve Your Credit Rating Quickly
Posted on November 10, 2017
You’ve heard for a long time that credit issues stay on your credit report for years. That’s true, and it’s for a good reason. Getting credit from a lender isn’t something you are entitled to. It’s given because you’ve earned it, and it’s hard work to get to that point. For many people, learning that lesson comes the hard way. Along with that lesson comes a substandard credit rating, and it truly can take years to recover.
It doesn’t have to be a major hurdle for years, though. Even if you have a few blemishes on your credit rating, it’s possible to get financing from good lenders sooner than you think. That means lenders who won’t overcharge you on interest and will offer terms you can live with. After all, you need a car loan that you can repay, not one that will further damage your credit rating.
Get started rebuilding your credit today. Here are three easy tips to improve your credit rating within a short time frame.
Pay Off Credit Card Debt
It’s so easy to pay with plastic. Using your credit card is like a small loan every time you use it, and you often don’t think about when you’ll get the bill. It’s usually the first bill to go unpaid when money gets tight. Interest rates can be obscene for many credit card companies, ranging up to 30 percent or even higher.
A quick way to help make your credit rating look better is to pay off the credit card balances. It takes discipline to put your ‘play money’ toward a credit card bill instead of a night out, but it’s well worth it for a few months.
Pay the balance down to zero, and pay the full balance on every statement. It looks fantastic to those who check your credit rating and can quickly improve your credit score.
Get a Small Loan
It sounds counterintuitive, but it works. Apply for a small loan from your bank with the sole intent of paying it off. Use it for a purchase you could pay for in cash. After a few months of maintaining your regular loan payments, pay the loan off in full with the cash you still have set aside.
Receiving and paying off a small loan shows you can handle the responsibility of borrowing money, and it reflects on your credit rating. Just make sure you are on time with your payments or it will have the opposite effect on your credit score.
Save Money
Your parents always told you to set money aside for a rainy day, but they didn’t tell you it’s good for your credit rating too. Start a savings account and consistently set aside money from every paycheck. Having accessible cash in the bank is great for your personal finances and it looks good on a credit application too!
